Telecom Marketing

8/8/2019 Telecom Marketing

1/37

Last couple of weeks has seen spirited discussions and threadbare analysis of what Infosysmanagement will guide for FY08, largely fuelled by the steep rise rupee and fears of economicslowdown in the US. From stock market perspective, Infosys, being the only large player besidesSatyam that gives an annual guidance, sets the tone for what one should expects from the overallIT services sector.

We believe much of the analysis and scenario projections around Infosys' guidance are a futileexercise. Over the last 5 years since Infosys has started given guidance, it has outperformedevery time by a significant degree both on EPS and revenue, including a yearFY04in whichrupee appreciated by as much as 3.6%. Thus, our focus should remain on business fundamentalsand an analysis of trends in key business drivers.

We believe the demand environment for offshoring remains strong. There has been muchspeculation on fall-out of possible economic slowdown in the US. We believe this has beenlargely a case of people jumping the gun. Without getting into the discussions on whether andwhen will be the slow-down in the US economy, we think there arent any leading indicators ofslowdown in the IT spend. Our analysis of quarterly growth rates of the US GDP and dollarrevenues of the top four Indian IT services companies indicate a marginal co-relation only with a

2 quarter lag.

One should also note the constant evolution in the profile of offshoring per se over the last fewyears where-in, it has moved from traditional service streams of application development andmaintenance (ADM) to newer service lines such as package implementation, infrastructuremanagement, IT consulting and business process outsourcing. The share of non-ADM servicesfor Infosys has grown to 48% in 3Q 2007 from 17.6% in FY2000. Despite this rapid growth,Indian players only have 0.9% share of the global non-ADM services market (which account forover 89% of the $445 billion worldwide IT services market). An expansion in the market shareto even 3.2% by 2010 should help in sustaining the current growth rate for the industry.

Indian companies, especially tier 1 players, are also seeing expansion in the deal wins for ADMservices, both from size and duration perspective. The top six companies have announced at least16 $50 million plus multi-year deal wins so far in FY2007, compared with eight deal wins ofsimilar size in FY2006. The growing share...

of annuity-based business should increase the visibility. However, we believe the growth willremain volume-led; despite the reported MSA (master service agreement) renewals at 3-5%higher price points, we believe average blended realisation growth will be muted.

From supply perspective too, we believe quantity is not a concern. We believe macroenvironment remains strong, especially for the larger players, in an industry where scale isincreasingly becoming a big, if not the biggest, differentiator.

The telecommunications industry remains attractive

Notwithstanding a challenging economic background and rising unemployment, thefundamentals of the telecommunications industry continue to be attractive. The sector remainsrelatively resilient, but not immune, as it provides essential services that serve a fundamentalhuman need to communicate for work and social purposes. In this environment, the sector


2/37

leaders, such as Vodafone, continue to be able to innovate and deliver new products and servicesas well as generate strong cash flow.

Although revenue from traditional services of voice and messaging in mature markets is growingmore slowly due to competitive and regulatory pressures, there remains a significant growthopportunity in mobile data. There are also growth opportunities in enterprise and broadband

markets due to increasing demand for integrated solutions, international services and convergedofferings.

Within the Vodafone footprint, emerging markets, such as India, continue to exhibit the potentialfor strong growth due to low mobile penetration rates of around 38% on average, compared toover 120% in Europe, which together with higher GDP growth prospects, provide a significantcustomer growth opportunity.

Vodafone is well positioned in the telecommunications industry

The Group believes its leading market position is demonstrated by a strong level of free cashflow, with some 18 billion generated over the last three years, a resilient structure based on adiverse portfolio of assets in both mature and emerging markets and a number one or two

ranking in most countries in which it operates. The Group has also been a pioneer in dataproducts and services, developing high speed mobile broadband networks and providing simpleto use and attractive devices with features such as touch screen technology. The Group has arecognised brand in consumer markets and a strong position in the enterprise segment. Inaddition, Vodafone is already well placed to benefit from growth in emerging markets, with apresence in a number of the countries where significant growth is expected. In a difficult marketenvironment, the ability to control and reduce costs is ever more important. Against thisbackground, the Group continues to drive network and IT savings through both consolidationand centralisation of core activities, as well as local operating company initiatives. Vodafonealso benefits from a variable cost base as only around one third of cash operating costs are fixed.

May 2006 strategy

In May 2006, Vodafone formulated a five point strategy and strong progress has been madeagainst the key objectives. Mobile phone usage has grown significantly, partly offsetting pricedeclines, key operating costs and capital expenditure targets have been met and exposure toemerging markets has increased. The share of revenue from non-core mobile or totalcommunication services has grown through both significant data revenue growth and anincreased fixed broadband presence. In addition, the Group has refined its portfolio of businessesand disposed of several non-core assets. Lastly, Vodafone has maintained a disciplined approachto its capital structure, which has proved right for the business, particularly in the currentenvironment, and also returned a significant level of cash to shareholders.

Evolving telecommunications environment

A number of challenges have evolved since 2006. In particular, the macro economicenvironment has become more challenging. Competitive pressures continue to be strong,contributing to price declines of around 15% per annum. Consumers have an ever growingchoice of converged communication offers from established mobile and fixed line operators andnewer entrants including handset manufacturers, internet based companies and softwareproviders. In addition, mobile virtual network operators, that lease network capacity from mobilecompanies, are becoming increasingly prevalent. Finally, regulators continue to press forsubstantially lower mobile termination rates and roaming prices, and these areas together accountfor around 17% of Group revenue.


3/37

November 2008 revised strategy

In light of the changing environment the Group revised its May 2006 strategy. The new keytarget is to focus on driving free cash flow generation. This target is supported by four mainobjectives: drive operational performance, pursue growth opportunities in total communications,execute in emerging markets and strengthen capital discipline.

Drive operational performance

Vodafone aims to improve execution in existing businesses through customer value enhancementand cost reduction.

Value enhancement involves maximising the value of existing customer relationships, not justthe revenue. This approach shifts away from unit based tariffs to propositions that deliver muchmore value to customers in return for greater commitment, incremental penetration of theaccount or more balanced commercial costs. This requires a more disciplined approach tocommercial costs to ensure investment is focused on those customers with higher lifetime value.Customer value enhancement replaces the previous focus on revenue stimulation.

The Group has established a significant number of initiatives which are expected to reduce

current operating costs by approximately 1 billion per annum by the 2011 financial year, to helpoffset the pressures from cost inflation and the competitive environment and to enableinvestment in growth opportunities. As a result, on a like for like basis, Vodafone is targetingbroadly stable operating costs in Europe and for operating costs to grow at a lower rate thanrevenue in emerging markets between the 2008 and 2011 financial years. Capital intensity isexpected to be around 10% over this period in Europe and to trend to European levels inemerging markets over the longer term.

Pursue growth opportunities in total communications

Regarding growth opportunities, the three target areas are mobile data, enterprise and broadband.Vodafone has already made significant progress on mobile data, with annual revenue of 3billion, 26% higher on an organic basis than that of a year ago, but the opportunity remains

significant as the proportion of the customer base that regularly uses data services is only around10% in Europe. In the enterprise segment, Vodafone has a strong position in core mobileservices, mainly amongst larger corporations. The aim is to build upon this position and expandinto the broader communications market, serving small and medium sized businesses withconverged fixed and mobile products and services and to continue to increase the Groupspenetration of multinational accounts. In fixed broadband, the Group has a presence in all of itsEuropean markets and 4.6 million customers globally. Vodafone continues to adopt a market bymarket approach focused on the service, rather than the technology, and targeted at enterpriseand high value consumers as a priority.

Execute in emerging markets

Vodafone is already represented in a number of attractive emerging markets. The Groupsprincipal focus is now on execution in these markets, particularly in India, Turkey and theexisting African footprint, following the acquisition of a controlling interest in Vodacom basedin South Africa. Where possible, Vodafone will also seek to maximise the mobile dataopportunity. While new markets are of interest, Vodafone will be cautious and selective onfuture expansion. The primary focus will remain on driving results from the existing footprint.

Strengthen capital discipline


4/37

The Group is focused on generating 5 billion to 6 billion of free cash flow per annum,excluding licence and spectrum and any potential CFC tax settlement. In terms of cashdeployment, the priority is to invest in existing businesses, expand in the growth areas of mobiledata, enterprise and broadband and acquire, where appropriate, new spectrum to support voiceand data traffic growth.

Beyond this, the Group will aim to enhance returns to shareholders, primarily by increasingdividends. In November 2008, the Board adopted a progressive dividend policy where dividendgrowth reflects the underlying trading and cash performance of the Group. The Group remainscommitted to the current low single A long term average credit rating.

After investing in existing business and returns to shareholders, the Group will consideropportunities to reshape the portfolio. In emerging markets, the focus is on execution rather thanexpansion. In addition, the Groups current capital structure implies that any significantacquisition would likely need to be funded through portfolio disposals. Vodafone supports in-market consolidation, such as the recent agreement to merge the Australian assets of Vodafoneand Hutchison 3G Australia to form a 50:50 joint venture.

Economic and Market Trends that Drive the

Telecom Revolution

Coupled with the technological trends, the revolution in the telecom sector has been drivenby the dynamism in the telecommunications market globally. The liberalization of the

sector, the extension of services by multinational conglomerates across nations and theactive competition currently in place in the sector have all contributed to the telecom

revolution. To expatiate further on the market trends, we shall look at the development of

the telecom market; to do this we will examine the following issues:MonopolyIn a monopoly scenario, a single supplier supplies the whole market. Traditional view of thetelecommunications sector is that the telecommunications market was monopolistic in

nature. Telecommunications industry was traditionally a natural monopoly, where thetelecom services and the collection of products were supplied by one telecommunication

company. In a monopolistic market structure, the company and the industry are identical.

The single company makes all the output and price decisions, it has complete control overthe market (Gerber & Braun 1998). Traditionally, the telecom service providers, or

operators have been government-owned monopolies.

One major problem with telecom monopoly is that monopolist may exploit its market

position by charging excessive prices and compromise quality of service. With the reforms in

the telecom industry, came a series of restructuring of the telecom industry. Today mostdeveloped countries are or have introduced competition in the telecom market that was

once monopolistic in nature. Driven by technological developments, competition has cometo dominate a market that was once a monopoly. For instance, in 1976 in the U.S, the

traditional monopoly service provider was faced with competition in the long-distancemarket from use of microwave technology (Gerber & Braun 1998). The development of

wireless technology has brought in competition in the telephony market, with fixed linesubscribers migrating to cellular markets where there are competitive services. In Africa,

most fixed line operators are still monopoly in nature, however there is competition in the


5/37

cellular market. The South African government is in the process of introducing a SecondNational Operator to compete with Telkom, the monopoly fixed line service provider.

Privatization and LiberalizationAmongst the wave of reforms that characterized the global telecom markets in the 80s and90s, was the privatization of national companies. Privatization and liberalization are two

telecom reforms that improve the public treasury. Since the processes of liberalization andprivatization have been taken into consideration by countries such as India, Malaysia and

South Africa, their telecommunication infrastructures have improved drastically. Malaysiangovernment has developed its telecommunication infrastructure by privatizing the former

RTT, which is presently known as Telkom Malaysia, and most of its shares are sold in thestock exchange.

Privatization and liberalization cut the existence of monopoly and promote competition. Theprivatization of national companies comes in either public stock floatation or private sales to

strategic investors. In the telecom sector, it could also include the opening up of market toprivate investment in the thriving telecom market. In developing countries, the realization

that investment in the telecom infrastructure is a necessary foundation for economicgrowth, has further spurred the need for privatization. Developing countries identify that

massive investment is required to address the low teledensity and poor service typical of

the telecom market. Such investments, in most cases, are far beyond the reach of manygovernments that have other social development projects to fund. Subsequently privatesector investment through privatization of national carrier or other forms of private sector

involvement is often the only recourse (Pisciotta, 1997). Another reason for privation isalso to tap into the advantages that modern technology offers through foreign investment

into the local telecom infrastructure.

Definition of the Two ConceptsPrivatization

Privatization can be defined as the selling and transferring of at least part of the stateownership of a corporation to private owners. It can be defined as the process where by the

government handover its management or assets of services to private interest.It can also be defined as a transfer of government (public) agency to a non-government

(private) body. Privatization is the transfer of public functions and resources to the privatesector. This transfer can entail the operation, management, or actual ownership of publicly

owned facilities.

LiberalizationLiberalization

Liberalization usually means the process of transferring monopolistic market to a freemarket environment, which will expand trade relation and also promote competition.

Liberalization encourages the lifting of barrier to entry to accommodate many players in themarket and hence transform a market into a free and open market. The World Trade

Organization has prescribed liberalization of the telecom market. Many countries haveendorsed the WTOs liberalization guideline and subsequently open their telecom market,

leading to open and competitive market. Specifically, it has brought about an era ofcompetition in the telecom sector. Privatization without liberalization is possible: a

monopoly merely becomes a private one. In most cases of telecommunicationsprivatization, however, some element of liberalization is involved.

Privatization of a public telecommunication operator can generate a lot of financial

benefit, as privatization can be considered as the component of the development of a

market economy. Privatization can benefit the majority of the people. Analystsmostly welcome the governments stance on the sale of public telecommunication

operator because they do not expect this to have a major impact on the currency. In


6/37


7/37


8/37

4. Private Sector Participation without Privatization and LiberalizationThis is an innovative way of attracting private sector investment and expertise

without actually privatizing and introducing competition. Ways of doing this include

the granting of concessions by national operators to private industry to build and/oroperate certain facilities or services. The national operator then enters into a

management contract to improve operations and enhance profitability. In this model,

foreign investments are invited in the form of build, transfer and operate (BTO)arrangements. In these arrangements, private companies invest capital to develop aproject and operate the system for a period of time, ownership rights are eventually

transferred to the government company. Examples of these arrangements are inSaudi Arabia and China- where private sector participation in telecom is not

permitted. Private company involvement is limited to consultant services and supplycontracts (Pissciotta, 1997: 339).

CompetitionThe increasing competition in the global telecom market has greatly impacted on the

telecom revolution. The liberalization of the telecom industry opened the doors tocompetition and brought an end to a period when telecom was considered a natural

monopoly. Coupled with technological development in the telecom sector, competition has

revolutionized the sector remarkably. It has increasingly led to the expansion of telecommarket and this expansion of market has increased access rate to telecommunication

services.

The evolving nature of competition in telecommunications and information activities in

general is interwoven with different issue: the technological trajectories; changes in theinstitutional arrangements; investment in information-handling capabilities and general

infrastructure; shift in demand for information goods and services and policy fashions(Lamberton, 1995: 6). Two major issues are essential to the advent of competition in the

telecom sector:

Liberalization and

Technology

Liberalization of the telecom market which leads to removal of barrier to entry, coupled withprivatization of telecom corporation which encouraged private investment are precursors to

the advent of full competition in the telecom sector. The introduction of competition meansthat a well-established telecom monopoly operator has to compete with new entrants in the

different segments of the market. Competitors are diverse in their operations; they are notonly limited to telecommunications operators. Telecommunications operators have to

compete with providers in parallel markets and vice-versa. An example is a telecom

company providing internet service and competing in the internet service provision market.With adoption of the liberalization programme, many countries opened up their telecom

market by issuing licenses to operators. In South Africa, the first phase of liberalization ofthis sector took place in 1997, when two cellular providers, Vodacom and Mobile Telephone

Networks (MTN), were licensed to offer cellular services. Liberalization of the ICT sectorencourages the entry of new telecommunications companies and fosters greater competition

in the sector. Today there are three cellular providers competing in the South Africanmarket. The liberalization of the telecom sector in Nigeria and the concomitant issuance of

operating licenses have brought immense competition into the market. Today Nigeria hasfour cellular providers.

The growing development in communication technology has increasingly made it impossiblefor a monopoly telecommunication corporation to provide the varieties of services available

in the telecom sector. Traditionally telecommunications services were limited to basic voicetransmission; today we witness the availability of a gamut of telecommunication services


9/37

brought about by innovations in communication technology. For instance the introduction ofcommercial Internet into the telecom market brought in an era of competing internet

service providers and development in wireless technology-specifically cellular technology-has resulted in the era of cellular service providers.

Competition in the telecom industry has stimulated growth in the sector. Amongstnumerous benefits, competition encourages:

Choice: Customers are provided with varieties of products and services to choose

from.

Good quality: competing suppliers strive to out-do each other and invariably strive

for good quality product and service in order to beat the competitor. This also

ensures that the customers get quality products.

Accessibility: products and services are provided in close proximity of the customers.

Customers do not to have to go extra miles to have access to products andservices.

Prices: competing suppliers attract customers by attaching affordable and low prices

to their products. Price is a strong tool used by competing firms to attract

considerable customer base

Improves and maintain standard: Competition encourages the improvement and

maintenance of standards of products and services. This will help in attracting newcustomers and also gives satisfaction to current customers

Stimulate growth: Competition stimulate the growth of the market and the economyin general

1.

This is the 1st part in the India Telecom report series.Internet & Broadband services havebeen unable to emulate the growth that is seen by Indian Mobile sector, but it is growing steadilynevertheless. The Indian government has heady plans when it comes to Broadband and Internetservices growth.

To achieve is 500 million subscriber base in next 3 years seems to be near impossible target !

Lets look at the where Indian Internet & Broadband services stand for the quarter ending March2009:

Indian Internet & broadband services snapshot

According to TRAIs report, India currently has only 13.54 million Internet subscribers, whichincludes broadband. This is a ridiculously low number !

Even the growth rate is lowly 5.3% We seriously have problems when it comes to Internetpenetration !
http://trak.in/wp-content/uploads/2009/07/IndiaInternetBroadbandSubscribers.jpg


10/37

While the wireless data Internet subscribers show close to 118 million subscribers, majority ofthem are GPRS connection on mobiles, which according to me should not be counted as Internetsubscribers.

Indian Internet Subscriber Growth

There were 13.54 million Internet subscribers at the end of March 2009 as compared to12.85 million Internet subscribers at the end of December 2008 registering a growth of5.30%.

This growth rate is higher as compared to the growth rate of 5.01% at the end ofDecember 2008.

Besides above, there were 117.82 million wireless data subscribers at the end ofMarch 2009 (capable of accessing data services including internet through mobilehandsets (GSM/ CDMA)).

Broadband Subscriber Growth - The number of Broadband subscribers (with adownload speed of 256 Kbps or more) was 6.22 million at the end of March 2009 ascompared to 5.52 million at the end of December 2008. The growth rate of broadbandsubscribers in this quarter is 12.68%.

Technology Used to Access Internet
http://trak.in/wp-content/uploads/2009/07/IndiaInternetSubscriberbase.jpg


11/37

Broadband Subscribers Share (Technology wise) Out of total 6.22 millionbroadband subscribers,

5.364 million are DSL based;

0.474 million Cable Modem;

0.244 million Ethernet LAN;

0.042 million Fiber;

0.072 million Wireless,

0.020 million Leased Line

0.002 million use other technologies

Internet Subscriber Growth QoQ
http://trak.in/wp-content/uploads/2009/07/InternetandBroadbandServicesgrowth.jpghttp://trak.in/wp-content/uploads/2009/07/IndiaBroadbandAccessTechnologyused.jpg


12/37

Although, Indian broadband connections have doubled in last one year, the growth rate is stillnot enough. With a country population of close to 1.2 billion, 6.22 million broadbandconnections is just ridiculous !

Telecom industry analysis uncovers the fact that this industry has a huge business potentialityand is going to be a booming industry. Telecom industry analysis also reveals that this industrywill provide an immense employment opportunity in the coming years.

Statistical report

Phoenix Center research revealed that in the coming years, there will be a healthy competitionamong the providers of telecommunication services. At the same time, the price will be lowerand quality will be higher. The new telecommunications technologies will replace the traditionaltelecom services. Statistical data also reveals that the telecommunications industry is going to be

a dynamic and booming industry in the near future. The telecom industry comprises of complexnetwork of services like telephones, mobile phones and internet services.

Telecom industry trends

Throughout the world, telecom industry are being controlled by private companies instead ofgovernment monopolies. Traditional telecom technologies are also being replaced by modernwireless technologies, specifically in case of mobile services. One of the major objectives oftelecom industry is to enhance the quality and speed of Internet technology.

These days, telecom industry is more concerned with texts and images (Internet technologies),rather than voice(telephone service). Most of the research works are going on Internetaccessibility, specifically on data applications and broadband services. The other major divisionof telecom industry is mobile network sector, where lots of innovative research works are goingon. Previously the traditional telephone calls used to earn the maximum revenues, but these daysmobile service is going to replace traditional telephone services.

Telecom industry analysis from the experts point of view


13/37

Telecom industry is a vast and diversified industry and needs a huge capital to invest. That is

why the competitors of this industry should be such that they can meet that demand. From the

investor's point of view, it can be said that they should be well aware of cash flow in this

industry.

Telecommunications industry deals with the activities and services of electronic systems fortransmitting messages through cables, telephone, radio or television.

Components and factors responsible behind the growth of telecommunications industry

Two major factors responsible for the growth of telecommunications industry are use of moderntechnology and market competition. One of the products of modern technologies is optical fibers,which are being used as a medium of data transmission instead of using coaxial or twisted paircables. Optical fibers can carry a high volume of data and are easier to maintain and install. Useof communication satellites make this telecommunications industry a booming industry.

The use of mobile network has a crucial role behind the growth of an improvedtelecommunications industry. Leading companies are showing their interest to invest in thistelecommunications industry.

Telecommunications industry is going to be a digitized one. Use of ISDN (Inter Services DigitalNetwork) makes this telecommunication industry a total digitalized system and eventuallyenhanced the speed and quality of digital communication.

The introduction of these advanced technologies makes the telecommunications industry acompetitive one, where a number of multinational companies have shown their interest to investin this industry and consequently the prices are reduced, the quality is also improved. During theperiod of 1990, the telecommunication industry showed a speedy growth in terms of investmentand eventually increased the competition. The competition between the companies led to thedecline of revenues.

Employment opportunities in telecommunications industry

Telecommunication industry has created immense employment opportunities. Most of the

employees in this industry are engaged in large establishments, although there are some small

establishments, where a large number of small contractors are involved. Fifty five percent of all

workers are engaged in office and administrative support occupations. The other occupations of

this industry relate to installation, maintenance, and repair .

To know more about telecommunications industry one can browse through the following links:

Telecom industry in India has a big market potentiality and is a fast growing sector.Government of India is eager to reconstitute this telecom industry by enacting effective policies


14/37

for more investments from foreign companies, which results in a very competitive andderegulated market in the world.

Policies of telecom industry in India

Government of India implemented the unified access licensing regime, which enables basic andcellular mobile service to use any modern technology. In 1997, Telecom Regulatory Authority of

India (TRAI) was formed to facilitate the growth of the telecom sector in India.

Major services and market potentiality of Telecom industry in India

Telecommunication sector in India is primarily subdivided into two segments, which are FixedService Provider (FSPs) and Cellular Services. Telecom industry in India constitutes someessential telecom services like telephone, radio, television and Internet. Telecom industry inIndia is specifically emphasizing on latest technologies like GSM( Global System for MobileCommunications), CDMA(Code Division Multiple Access), PMRTS(Public Mobile RadioTrunking Services), Fixed Line and WLL(Wireless Local Loop ). India has a prospering marketspecifically in GSM mobile service and the number of subscribers is growing very fast.

Economic perspective of telecom industry in India

Telecom industry in India has a major role in Indian economy. The Indian government is alsoenforcing some effective telecom policies and regulations for the infrastructural growth of thisindustry. Indian telecom market provides a tele-density of 8.5 percent as registered in the year2004. A number of leading multinational telecommunication companies are approaching andshowing their interest to invest for the telecom industry in India. Telecommunication industry ofIndia ranked sixth among all the telecommunication sectors in the world. In the year 2004, thetotal number of telephone subscriptions were US$93.2.

Leading telecommunication service providers of telecom industry in India

Bharat Sanchar Nigam Limited, Mahanagar Telephone Nigam Limited (MTNL), Videsh Sanchar

Nigam Limited (VSNL), Bharti Airtel, Tata Teleservices, SIFY Ltd.

The Role of Mobile VoIP in the Future of Mobile Internet Mobile Internet will be dominatedby mobile VoIP and other chat applications to give users a fully integrated 'mobile freedom'Thursday, July 02, 2009

Print Comment Email Digg Del.icio.us Reddit

Mobile Internet take up isdominated by mobileVoIP, now an established reality globally, in both developed and importantly developingcountries as the benefits of cost and flexibility are well understood. What is not certain yet ishow the supply chain will eventually pan out and where the value will settle betweenindependent suppliers, operators, media owners and vendors such as Microsoft and Googlegetting involved with their own mobile services. This article aims to examine the factorsinfluencing successful collaboration between these players.
http://tmp/svpah.tmp/javascript:openWin('printer.asp')http://tmp/svpah.tmp/javascript:openWin('email.asp')http://digg.com/submit?phase=2&url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://del.icio.us/post?v=2&url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://reddit.com/submit?url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://reddit.com/submit?url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://del.icio.us/post?v=2&url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://digg.com/submit?phase=2&url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://tmp/svpah.tmp/javascript:openWin('email.asp')http://voicendata.ciol.com/content/ContributoryArticles/109070202.asp#commenthttp://tmp/svpah.tmp/javascript:openWin('printer.asp')http://tmp/svpah.tmp/javascript:openWin('email.asp')http://digg.com/submit?phase=2&url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://del.icio.us/post?v=2&url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://reddit.com/submit?url=http://voicendata.ciol.com//content/ContributoryArticles/109070202.asphttp://tmp/svpah.tmp/javascript:openWin('printer.asp')


15/37

Nimbuzz is the comprehensive mobile VoIP, Presence and IM provider that also brings voice tosocial networks. Mobile VoIP is a highly competitive sector with many well known and not sowell known providers offering different MVoIP components. Nimbuzz' s USP is offering itsproduct across the widest range of handsets, across the most IM and Social Networkcommunities and in the most countries, a vision they call 'Mobile Freedom'.

To put it succinctly, content suppliers have two commercial aims, first to build user base to makeboth a successful business and also as a commodity to offer potential partners. Second, toinvestigate ways services can be leveraged financially, a process that has already started forNimbuzz with 10 major social network and 3 operator deals on the table. Making MVoIP andassociated services a commercial success is something the industry as a whole is starting to thinkabout and this article will investigate the success to date and the potential future impact ofmobile freedom.

In the immediate future, the current confusing market is allowing third party providers such asNimbuzz to offer mobile VoIP using Wi-Fi services or the user's data plan exploiting openoperating systems, flat-rate data plans and features like 'naked SIP' and built-in VoIP capability.By working with providers, operators have the opportunity to gain experience of mobile VoIP

from independent specialists thereby reducing risk of their own large scale roll out.Future market success factors

The success factors in this area include pricing structure as operator response to existing priceerosion already exists - cutting internet data costs and introducing fixed data packages. The otherfactor is in developed countries vis a vis developing where a dollar is a weeks pay. In the enduser take up, current growth is also due to increased take up of smart phones moving away fromthe early adopter and high end business user to mainstream audiences. Further, the propensity todownload software, initiate calls via PC, swap Sim cards etc vs unacceptable high roaming tariffsleads to offering a fully integrated service.

Customers like choice and the products they will want and use vary according to country, callingpatterns, preferences, handset, "host" mobile operator, specific tariff, partnerships, interest in"enhanced" VoIP vs. cheap calls etc. The other factor is integration of familiar technologies egSkype to break sown barriers to trial. Reports suggest that the number of VoIP subscribers willmore than double in the next four years and Disruptive Analysis forecasts 255m active VoIPo3Gusers by the end of 2012, with the figure dominated by mobile operators' own 3.5G+ voiceservices. Despite this growth, penetration will still be below 10 per cent of total global mobilesubscribers, and around 20 per cent of all 3G+ users, by 2012

Integration into the mobile value chain

Most 3GPP/UMTS operators will need to wait until 2012 before starting broad migration ofcircuit telephony to standardised VoIP. In the meantime, they will have to compete or partnerwith pre-standard VoIP players with multiple options for both operators and independentspecialists becoming a virtual mobile operator vs partnerships. Integrating mobile data servicesonto handsets, VoIP will eventually become invisible to users as one of many Internet serviceson the handset. It will be more important to embed mobile VoIP into new devices, services orweb applications (Voice 2.0) than adding video or other media streams. Standalone Mobile VoIP


16/37


17/37

higher premium because there are scores of people lining up with content for distribution whileeverything cannot really be distributed.

Another development in the near future is that TV over mobile is going to be easily accepted. Wedefinitely will see exclusive content but due to limitations in bandwidth primarily and due to thenature of the screen and short attention time spans, we will see mostly TV 'munching' or short

TV shows (like our very own WATShow).In the past, the impression was that content over the mobile will be paid for, and the revenueswill be much bigger on the Mobile phones than on the Internet. This was primarily because ofthe mindset that exists in the consumer's mind who thinks that everything on the Internet is (orshould be) free, while everything on mobile phones is/or can be paid for.

Key Takeaways

To sum up, mobile Internet will be dominated by mobile VoIP and other chat applications togive users a fully integrated 'mobile freedom' especially when consumers are demanding lowercosts of communications and are becoming familiar with finding and using new technologies toachieve this. The supplier market is currently fragmented allowing room for independentinnovators to make their mark with key developmental challenges being faced by contentproviders, network operators and others in the mobile internet value chain.

Further, operators concentrating on their current mobile internet capabilities will use thetechnology innovations of independent suppliers to make their own entry into the market viapartnerships. Finally, mobile internet is a strong future revenue stream but advertising modelsneed to be honed to provide proven value for brands before budgets will be allocated.

(Contributed by Evert Jaap Lugt, the Founder and CEO of Nimbuzz)

Mobile VAS Consumption And Insights on Serviceproviders in Urban India

Mobile subscriber review on Service providers (cellular operators)

in India, likelihood of VAS options by subscribers

FOR IMMEDIATE RELEASE

PRLog (Press Release) Jul 15, 2009 BANGALORE, India - Evolution of cellulartechnologies and increasing number of mobile subscribers in India has driven

telecommunication industry to become one of the fastest growing industry in India

today. Mobile users are in constant look out for new cellular services. To meet this

demand, service providers are persistently working on providing innovative and

attractive mobile value added services. There has been significant increase in

revenues for service providers ever since the existence of cellular technologies.
http://www.prlog.org/http://www.prlog.org/


18/37

Mobile phones today have moved beyond their fundamental role of voice

communications. Subscribers are using their cellular phones to send SMS, play

games, read news, surf the Internet, keep a tab on astrology, download images,

listen to music, set ring back tone for callers or even check their bank accounts and

hence making the best use of Mobile VAS offered by service providers.

Vital Analytics a pioneer in analyzing urban Indian mobile phone usage trends has

released its VAS service provider report on Urban Indian Mobile space. State run

mobile service providers are perceived to be offering most reasonably priced

services! 22% of BSNL and 16% of MTNL subscribers feel they (service provider)

offer a more reasonably priced services compared to overall subscribers. On the

product diversity side, Aircel and Vodafone do a great job as 11% of both service

providers subscribers appear to agree than overall subscribers. On customer

service front, MTNL, Loop mobile and Vodafone Essar are ahead of the curve with

subscribers to each provider agreeing 16% more than overall that they offer reliable

customer service. In terms of VAS Options likelihood of usage, unlimited data usage

at lower cost and better SMS bundle offers are two most popular VAS options Urban

Indian would subscribe to if offered by service providers! When asked what options

if offered would Urban Indians subscribe to with their service provider,

bundle/unlimited usage type options came out on top with unlimited data usage at

low fixed pricebeing the most popular with over 40% suggesting they would likely

subscribe to, followed by better bundle offers in SMS value added services (39%

would likely subscribe).


19/37

VeriSign Supports Visa Mobile Platform to Advance Fast-

Growing Mobile Commerce Market

29 March, 2007 - VeriSign, Inc., (NASDAQ: VRSN), the leading provider of digitalinfrastructure for the networked world, announced today that it has entered into an agreementwith Visa to support the Visa mobile platform to advance the already fast-growing mobilecommerce market, through mobile marketing campaigns and point-of-sale redemption of mobileoffers.

"The Visa mobile platform provides mobile operators and financial institutions the opportunityto rapidly develop new mobile services utilising the unique interactive features of handsets." saidPatrick Gauthier, senior vice president, innovation, Visa International. "We are excited to beworking with VeriSign to combine secure payments with value-added promotional services. Ourcollaboration is designed to enable consumers to receive promotions and information relevant totheir purchase experience anywhere via their mobile phones."

As a result of the agreement, Visa will provide mobile offer management capabilities includingthe delivery of mobile coupons by leveraging VeriSign's content delivery services. VeriSign will

enable Visa, its members and merchants to create customised campaigns, mobile offers andpromotion programs. Additionally, the service will help marketers understand the performanceof their mobile campaigns potentially resulting in better returns on marketing dollars spent.

"Consumers are driving demand for new mobile commerce services and applications. They needto be able to access information and make purchases in a secure environment anywhere and onany device," said Brian Matthews, vice president of industry marketing -- financial services,VeriSign. "We are excited to help Visa deliver the most compelling mobile paymentexperience."

According to forecasts from a recent Juniper report, 2009 and 2010 will represent the start of thewider adoption of mobile payment applications and services and will result in close to $1 billionworth of worldwide payments being made via mobile by 2010.

Virgin Mobile India Strategy

Share

Favorite

Favorited X
http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/signup?from=favorite&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/signup?from=favorite&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategy


20/37

Get File

More...

Top of Form

Favorited! Add tags?

E.g: tech p Save

Cancel

Bottom of Form

Top of Form

Edit your favorites

Save

Cancel

Bottom of Form

Top of Form

Send to your Group / Event

Select Group / Event

Add your message Cancel

Send

Bottom of Form

Post to

Blogger

WordPress

Twitter

Facebook

Delicious

more share options

Embed For WordPress.com

Without related presentations
http://www.slideshare.net/signup?from=download&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845&download_id=1068553-5d7952592295e4bb3b112e0452f5375562681e31-slideshowhttp://www.slideshare.net/signup?from=AddToCommunity&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/signup?from=AddToCommunity&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/share/blogspot/1068553http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/share/tweet/1068553/Check%20out%20this%20SlideShare%20Presentation%20:%20Virgin%20Mobile%20India%20Strategyhttp://www.slideshare.net/share/facebook/1068553/Virgin%20Mobile%20India%20Strategyhttp://delicious.com/save?url=http://www.slideshare.net/qasim/virgin-mobile-india-strategy&title=Virgin+Mobile+India+Strategy&jump=yes&noui&share=yes&partner=slidesharehttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/signup?from=download&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845&download_id=1068553-5d7952592295e4bb3b112e0452f5375562681e31-slideshowhttp://www.slideshare.net/signup?from=AddToCommunity&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/share/blogspot/1068553http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/share/tweet/1068553/Check%20out%20this%20SlideShare%20Presentation%20:%20Virgin%20Mobile%20India%20Strategyhttp://www.slideshare.net/share/facebook/1068553/Virgin%20Mobile%20India%20Strategyhttp://delicious.com/save?url=http://www.slideshare.net/qasim/virgin-mobile-india-strategy&title=Virgin+Mobile+India+Strategy&jump=yes&noui&share=yes&partner=slidesharehttp://www.slideshare.net/qasim/virgin-mobile-india-strategy


21/37


22/37

Post Comment

Bottom of FormTop of Form

Edit your comment

Update

Cancel

Bottom of Form

Notes on slide 1

no notes for slide #1
http://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/qasim/virgin-mobile-india-strategy


23/37

6 Favorites

satyle favorited this 2 months ago

prernamahendru favorited this 3 months ago

edwinp favorited this 3 months ago

Llewella74 favorited this 4 months agoTagsvirginmobilestrategytoenterindia

manishsehgal007 favorited this 4 months ago

DN2009 favorited this 5 months ago

Tagsvirginmobileindiastrategymimpplan

more

-->

- Presentation Transcript

1. Virgin Mobile Retail strategy for entering the Indian Handset market

2. An Update

On 1st March 2008, Virgin Mobile has entered the Indian Market, tying

up with Tata Tele-services.

Virgin is primarily an MVNO company, and retail distribution is only a

part of the overall strategy.

3.

However, it is a very important piece.

Even for an MVNO like Virgin, having a finely crafted retail strategy can

mean the difference between a strong subscriber uptake rate or amediocre showing among the target audience.

4. Agenda
http://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/satylehttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/prernamahendruhttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/edwinphttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/Llewella74http://www.slideshare.net/tag/virginhttp://www.slideshare.net/tag/mobilehttp://www.slideshare.net/tag/strategyhttp://www.slideshare.net/tag/tohttp://www.slideshare.net/tag/enterhttp://www.slideshare.net/tag/indiahttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/manishsehgal007http://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/DN2009http://www.slideshare.net/tag/virginhttp://www.slideshare.net/tag/mobilehttp://www.slideshare.net/tag/indiahttp://www.slideshare.net/tag/strategyhttp://www.slideshare.net/tag/mimphttp://www.slideshare.net/tag/planhttp://www.slideshare.net/qasim/virgin-mobile-india-strategyhttp://www.slideshare.net/DN2009http://www.slideshare.net/manishsehgal007http://www.slideshare.net/Llewella74http://www.slideshare.net/edwinphttp://www.slideshare.net/prernamahendruhttp://www.slideshare.net/satylehttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/satylehttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/prernamahendruhttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/edwinphttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/Llewella74http://www.slideshare.net/tag/virginhttp://www.slideshare.net/tag/mobilehttp://www.slideshare.net/tag/strategyhttp://www.slideshare.net/tag/tohttp://www.slideshare.net/tag/enterhttp://www.slideshare.net/tag/indiahttp://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/manishsehgal007http://www.slideshare.net/signup?from=addcontact&from_source=http://www.slideshare.net/qasim/virgin-mobile-india-strategy?nocache=6845http://www.slideshare.net/DN2009http://www.slideshare.net/tag/virginhttp://www.slideshare.net/tag/mobilehttp://www.slideshare.net/tag/indiahttp://www.slideshare.net/tag/strategyhttp://www.slideshare.net/tag/mimphttp://www.slideshare.net/tag/planhttp://www.slideshare.net/qasim/virgin-mobile-india-strategy


24/37

Virgin Mobile - Company Brief

The Indian Opportunity

Competition and Positioning

The Indian Consumer

VMs Entry Strategy Review

Analysis and Recommendations

5. Virgin Mobile The Company

6. Global Reach

7. Virgin Mobile Charter As a customer, theres nothing more frustrating thandealing with a faceless bureaucracy or a member of staff who tows the partyline. A little something extra can really go a long way to improve a theirexperience and their opinion of Virgin. E.g. A Virgin Trains manager took allthe placemats from First class and folded them into fans for the passengerscaught in an unpleasantly hot carriage when the air-conditioning failed. To

add a personal touch to our customer experience: the little extras.8. Virgin Mobile Charter Speak from the heart, not a script. Talk to people the

way they prefer to be talked to with warmth and humanity. When VirginMoney sends people letters about their financial services they recognise itsthe customers money, not theirs. They dont write in jargon but as onehuman being to another To offer an experience thats 100% human, treatingcustomers with respect.

9. Organizational Mission

Keep it simple

Do what you say

Take the leap of faith Keep on checking

Stay true to your values

Love the locals

10.Virgins New Venture Strategy

When we start a new venture, we base it on hard research and

analysis. Typically, we review the industry and put ourselves in thecustomer's shoes to see what could make it better. We askfundamental questions: Is this an opportunity for restructuring amarket and creating competitive advantage? What are the competitors

doing? Is the customer confused or badly served ? Is this anopportunity for building the Virgin brand ? Can we add value ? Will itinteract with our other businesses? Is there an appropriate trade-offbetween risk and reward?

11.Size, Structure and Segments for Handset Retail

12.Mobile Retail - The Numbers

New Connections per month = 60,00,000


25/37

Handset Retail = 3,50,00,00,00,000

Airtime + Accessories + Handset = 7,50,00,00,00,000

13.The Demographics

50%

14.What Virgin Needs To Know No Bundling - Handsets sold directly so far, not by operators. This

works in the favor of retailers, though it has begun to change.

7-9 Models added every month.

Replacement sales account for as much as 60%.

People are replacing handsets every 18-24 months

15.Organized Retail

There are 95000 retail outlets in all

Only 1% of these are organized retailers

By Sales, organized retail has a share of 7%

16.The Future - Growth Rates

Handset retail market has been growing at a CAGR of 60%

Overall, the Mobile retail market is growing at 20%

According to Gartner figures for Sep 07, India recorded the fastest

growth in mobile handset sales

17.The Future - Volumes

18.The Potential - Handset Retail

19.The Future - Trends

Saturation in the urban market

Rural India will drive growth, accounting for 35-38% of total handset

market.

Aggressive promotions to get more common

Low priced handsets and handset bundle offers.

20.PEST Politico-Legal Environment

Politically stable country. However, there are certain parties with

vested interests that act as bottlenecks.

FDI allowed upto 24% for foreign players w.e.f. April, 2008

Availability of cheap as well as professional labour

Weak consumer protection laws

Increasing recognition of the potential in the retail space by the

government.

21.PEST - Economic Environment

7-9% growth rate; mobile retail growing at 20%.


26/37

Credit Sales have started, and Cell Phones are being sold on EMI.

The Monetary policy aims to contain inflation close to 5.0% in 2007-08

while conditioning expectations in the range of 4.0-4.5%.

Indirect taxes like service tax on immovable property adds to the

costs. The retailers want to move the service tax on rent, telephone,

etc to sales tax.

Consumer confidence in the organized retail format is high and

encouraging.

22.PEST - Social Environment

21.5 crore people between the ages of 14 25 years

Demographics - A lot of demand is coming from Rural India, as as

much as half of the newly added subscriber are from rural areas.

Growing middle class and youth with an increasing propensity to save.

Changing attitude- live for today

23.PEST - Technological Environment

The mobile sector has grown more than tenfold from 2001 to around 6

crore subscribers by mid-2005.

10% of the ISPs have 90% of the subscribers

The countrys mobile market stands at Rs. 35,000 crores and is

growing at an annual rate of 60%.

24.Porters Five Forces


Threat from New Entrants: High

Rising cost of retail real estate makes nationwide competition difficult,but numerous national and foreign players are interested to enter


Competitive Rivalry: Moderate

Margins are thin at mere 4%. Pressure from Second hand sales makes

it worse.

Buyer Power: High

Buyers Demanding greater variety at lower prices


Supplier Power: Moderate

Suppliers have strong brands and often have a presence in retail

themselves

Network Operators are able to push cheaper brands (e.g. Reliance

Classic)



27/37

Threat of Substitution: High

Second hand phone market and unorganized retail is strong.

Most demand is from rural areas where organized retailers dont have

a presence.

29.Competitive Landscape Players, Positioning and Strength

30.Existing Players

Nokia

Samsung

Sony World

ConvergeM (Future Group)

Mobile Store (JV between Essar and Virgin)

MobileNxt

Univercell

Hotspot (Spice Telecom)

RPG Cellucom

Subhiksha

M Bazaar

31.Nokia

Around 50% market share in Indian mobile market

Focus on Mother Brand than on Another Brand

Addressed all five needs REAPS of Indian Consumer

Strong focus on distribution network

Reduced their prices to counter the grey market

32.Mobile Store

Essar Group venture - entered Jan 2007

Target Segment - 18 to 45 years

Eyeing 10% market share, 2500 stores, 600 cities, and breakeven by

2010

Plans to invest 1250 cr by 2010

3 Formats - large medium and compact, in 20:60:20 ratio

Against Franchising - dilutes brand value

33.Positioning Map

34.Consumer Need Analysis Segments, Buyer Behavior and Gaps

35.Consumer Segments I want everything from my mobile and I want it now Myphone means I belong amongst my peers My life is a juggling act my mobilekeeps me connected I want a phone that makes me look good - even when Icant afford it To stay ahead of the game you need the best tools New


28/37

experiences, new possessions, new technologies thats what I want Illadopt new technologies if you show me a good reason Ill carry a mobile if Ineed to Pioneer Youth Mainstream Youth In-touch Organizers MainstreamMaterialists Careerist Experiencers Family Phoners Basic Phoners

36.The Indian CellPhone Buyer

Replace handsets every 18-24 months

High demand from upgraders

Price Sensitive - bulk of demand from sub 5000 price range

VAS such as Texting very popular among Urban, Young customers

37.The Opportunity

Urban youth: Distinct mobile needs

More and longer out-bound voice calls

Large calling circles for both making and receiving calls

Large users of SMS Both the earliest adopters and highest users of value-added services

Higher usage for both voice and SMS at weekends

38.Urban Youth: More Than Just A Segment

India has 21.5 crore people between the ages of 14 25 years old.

Incremental urban youth subscribers between 2008 and 2010 will be

more than 5 crores.

Urban youth mobile service revenues > Rs. 35,000 crores by 2010

Mobile as a badge of self-expression: brand and style very important

39.Indian Market Entry Strategy Target Segment, Positioning and Objectives

40.Virgin India Strategy

Target Segment - Urban Youth

Sales Objectives

Revenues of Rs. 35000 Crores by 2011 (including connections,handsets and accessories)

Image Objectives

Establish the brand name

Market Share Objectives

10% of the market in 3 years

41.Positioning - Seeking Youngistan

Mainstream Youth and Materialists

14-25 years

Young executives / students / Youthful Adults

42.Virgin India Strategy - Differentiation


29/37

Win a 10% share of the urban youth market by

Delivering imaginative solutions that offer

Value for money & flexible tariffs that reflect their unique needs

Innovative, game-changing value-added services

Great handsets at great prices

Personalized customer care

43.Virgin India Strategy - Cost

Whilst achieving a low operating cost per customer through

Sharp focus on Indias top youth markets

Fewer, stable propositions with low support and service costs

Imaginative, eye-catching advertising & PR that gets youth talking

A lean, enthusiastic team supported by simple processes

44.Differentiation Strategy - Customer Care Taking the hassle out of buying a cell phone

Try before you buy

Real conversations: no scripts

End-to-end ownership of problems: same Champ call-back

Champ empowerment: authorized to resolve issues on the spot

Welcome calls: all customers are personally welcomed to Virgin Mobile

A real returns policy

45.Returns Policy

q. Lost my charger, battery fell off and someone threw my phone

gasp!

a. Tension nahin leneka. Whatever your problem you can walk into any

service center and get replacements for faulty* items in your pack.Heres a list of our service center .

*conditions apply. But dont get scared about it.

46.Differentiation Strategy

Value for Money and Flexible Service Offerings

47.Differentiation Strategy - First Time In India

Get paid to receive calls

50 paise to any local network

TGI the weekend Bolt-on

One Touch access to V-Bytes

Unlimited access to V-Bytes for a simple daily charge

100% colour, 100% FM handsets


30/37

Easy Handset upgrades

Personalised Care

Safe Secrets

48.Virgin India Strategy - Promotions

Think Hatke Campaign 10 paise every minutes on incoming

49.Virgin India Strategy - Location And Ownership

You have to be in front of the right people.

Howard Handler

CMO, Virgin Mobile

50.Virgin India Strategy - Location

Shop in Shop and Kiosks

Non exclusive, extensive coverage, lower costs

The one commonality all of the retailers share is they are places where

teens shop, because that's Virgin's core market.

51.A Virgin Kiosk

52.Virgin India Strategy - Expansion Plans

To begin with, Virgin Mobile services were launched in 50 cities with

15,000 handsets & 40,000 top-up outlets. Also, with 55 Virgin Mobilekiosks & Shop-in-Shops.

Plan to expand to 1000 cities by 2008-end

Aims to acquire 50 lakh subscribers over the next 3 years, by when it

would be profitable. By the end of 2008, when the new GSM players start rolling out their

services, Virgin Mobile aims to offer similar services on GSM as well.

53.Virgin Mobile Analysis and Recommendations

54.South African Experience

Virgin entered as a 50-50 partnership with Cell C, H1, 2006

Classified itself as an ESP, since MVNOs are illegal in SA

Premium Pricing, supported by a strong brand, superior customer

service and pricing plan simplicity

55.Singapore Experience Entered through a tie-up with SingTel

Exited the market - citing premium pricing and crowded market

Customers placed more premium on Price

SingTel tariffs too high - texting too expensive


31/37

56.Strategic Choices for Mobile Retailers Price Volume Low High High Low CostStrategy-Viable Low Cost Strategy- Unviable Not sustainable PremiumPositioning-Viable

57.Positioning Virgin BRAND ENGAGEMENT CAN BE THE ONLY DIFFERENTIATOROFFER SIMILAR ACROSS RETAILERS ASSORTMENT EXPECTED CONSUMER

MORE EVOLVED PRICE COMPETIVENESS SHORT LIVED58.200 companies worldwide, employing 48 500 people, an annual Virgin Group

turnover of 10.8bn/US$20.4bn .one of the most exciting brands in theworld

59.SWOT

Threats

Rising Retail Costs

Lack of number portability - switching barriers

Unclear Government Policy on MVNO

Falling Handset prices - lower margins Saturation - Mobile penetration in excess of 40%.

Opportunities

India a growth story - 20-30% CAGR, highest handset sales volumes.

Organized Retail mere 7% by revenue, 1% by outlets.

Most entrants are new, few established competitors

60.SWOT

Weaknesses

Dependent on Partners for pricing, capacity

Non serious image may not go well with conservative Indian consumer.

Limited understanding of India Market

Strengths

Strong Global Brand

Limited overlap with Tatas existing customers

Very low fixed costs as it leases Network Time

Not tied to a particular Technology

61.Capitalizing On Strengths

Into retailing + service provider

If the GoI allows MVNOs then after tying up with GSM players, can beat

Reliance

Good brand recall

Structured pricing of airtime serves as a loyalty incentive, encouraging

active use

62.Making Weaknesses Irrelevant


32/37

People not familiar with the MVNO concept

Tata Teleservices does not have a good brand image

Confusion in the minds of consumer about the Virgin-Tata deal- a re-

branding exercise by Tata Teleservices?

63.Recommendations

Key advantage over other (non-operator) retailers - presence in both

retailing and airtime

Key advantage over operators - not tied to technology (as an MVNO)

64.Recommendations

Forge deal with a GSM player

Offer bundled plans - subsidize handset costs with Airtime

Offer for both CDMA and GSM - greater assortment

Offer plans for 2 years, with upgrade options

65.Recommendations

VM is moving in the right direction but time is still not ripe for a big

bang entry into handset retailing

Need to see the response to Airtime and expand in other cities

Continue tie-ups with existing Mobile retailers like Univercell, Hotspot,

M Bazaar, M Port, Vishal, etc.

66.Thank You !!

Trends and developments in the telecommunication environmentThe global market for telecommunications is expanding rapidly. It is not a question of demandpull or supply push. Both are happening. The interaction of these two forces has madetelecommunications one of the leading growth sectors in the world economy. It has also madetelecommunications one of the most important components of social, cultural and politicalactivity.

On the demand side, growth is pulled by an increasing reliance ontelecommunications and information technology in every area of humanlife in all sectors of economic and social activity; in government, in theprovision of public services, and in the management of publicinfrastructures; in the pursuit of knowledge and the expression of culture;in the control of the environment; and in response to emergencies,whether natural or man-made.

On the supply side, growth is pushed by rapid technologicaldevelopments which continuously improve the efficiency of existingproducts, systems and services, and provide the foundation for acontinuing stream of innovations in each of these areas. Particularlynoteworthy is the convergence of telecommunication, information,


33/37


34/37

In the past, most administrations of ITU Member States tended to be"all-purpose" creatures policy-makers and operators which bothprovided and regulated telecommunications on the basis of a "publicutility" model.

The liberalization of telecommunications has been accompanied by a

separation of these functions. The trend now is for administrations ofITU Member States to be policy-makers, nested within a generaldepartment of government (e.g. industry and trade); fortelecommunications to be operated by corporations whether public,private or mixed; and for "the public interest" in telecommunications tobe protected by an independent regulatory authority.

In countries that have introduced partial or full competition, the modelfor regulating telecommunications is changing. Principles derived fromcompetition law are taking their place alongside the classical precepts ofpublic utility regulation. In some jurisdictions, sector-specifictelecommunication regulation has been abandoned.

Again, the WTO agreement will amplify these regulatory trends. Morethan 60 signatories accounting for more than 90% of globaltelecommunication revenues have made commitments to apply in wholeor in part a set of regulatory principles including interconnection,transparency and anti-competitive safeguards. These regulatorycommitments, and indeed all other commitments, are subject to the WTOdispute resolution mechanism. They are therefore more than a voluntarycode of conduct. They are binding commitments which are enforceableunder the WTO dispute resolution mechanism.

In the 1999-2003 planning period, it is likely that the trends noted above with respect toliberalization, competition and globalization will begin to combine in new ways that may

ultimately change the way the telecommunication industry sees itself and is seen by itsregulator(s) and customers.

Countries that began permitting competition in telecommunications 10or 20 years ago generally introduced it in a planned and orderly manner:first in terminal equipment; then in value-added services; then in thelong-distance service; and finally in local and international services. Inaddition, competition was generally permitted among different serviceproviders using the same infrastructure before being allowed betweendifferent infrastructure providers. Even today, most countries that permitcompetition do so on a highly regulated basis

In this environment, the regulator must implement competitivesafeguards, nurture competition, ensure interconnection/interoperabilityand ensure broad and affordable access to necessary services

As a result of technological progress, convergence and marketliberalization, countries only now beginning to introduce competition areless likely to be in a position to plan an evolution of this kind

Even in those countries that have experience with competition, serviceproviders and regulators that have based their respective plans on an


35/37

orderly evolution of this kind are finding that the "rules of the game" aresuddenly changing, that competition is coming from unforeseendirections, and that it cannot be regulated as it was in the past

More than any other phenomenon, the Internet symbolizes the changingnature of telecommunications. It is based on different technologies,

network architectures, standardization and addressing schemes. Itseconomic foundations and charging principles are diametrically opposedto those of public telecommunication operators. It has experiencedphenomenal growth and it has largely been outside governmentregulation. Yet it is emerging as a serious alternative to the traditionalservices provided by the telecommunication industry in every marketsegment, from intra-corporate communications to public voice

From one point of view, encouraging progress has been made in the 1995-1999 period in certaincountries and some regions in forging the "missing link" identified by the Maitland Commission.Overall, the gap between developed and developing countries in access to basictelecommunication services is closing. However, from other points of view, new gaps are

beginning to appear:

In general, the majority of the least developed countries (LDCs) havemade little progress in the past five years in closing the gap in access tobasic telecommunication services. In some cases, teledensity (thenumber of telephone lines per 100 people) has fallen, as populationgrowth has outstripped telecommunication growth. New technologiessuch as global mobile personal communications by satellite (GMPCS)may help close the "telecommunication gap". This will only be possible,however, if their services are affordable to inhabitants of the LDCs.

There is currently an enormous gap between developed and developingcountries in access to the Internet. Even as the telecommunication gapwhich has preoccupied the Union for so many years is beginning toclose, an "information gap" of even greater proportions is opening up.

A difference in regulatory practices is emerging between countries whichhave decided to liberalize their telecommunication markets under theWTO agreements, and those that have not. If competition brings the firstgroup of countries the anticipated benefits in terms of investment,technology transfer, innovative services and lower prices, theseregulatory differences may become a new development gap. In thisregard, it is important to recall that although the 119 ITU Member Statesthat are not yet part of the WTO basic telecommunications agreementgenerate less than 10% of global telecommunication revenues, they

include more than 45% of the world's people.

On the eve of the 21st century, the Union thus finds itself in a dynamic situation. On the onehand, the goal established by the Maitland Commission of achieving universal access to basictelecommunications will be technically achieved, and the overall gap between developed anddeveloping countries is steadily narrowing. However, at the same time, new differences aredeveloping, for example within the developing world, between the LDCs and other developingcountries, between liberalized and non-liberalized countries which may be either developed or


36/37

developing, and between countries that are moving rapidly towards competition and thosemoving at a slower pace.

This raises important questions in relation to the vision of the global information society (GIS).This vision was the subject of considerable discussion during the 1995 1999 period, initiallyin the G-7 group of advanced industrial economies, then in the broader international community.

Today, the basic ideas behind the concept of the GIS have been broadly accepted and indeedendorsed. In this vision, all forms of economic, social, cultural and political activity willincreasingly depend on access to the telecommunication and information services provided bythe global information infrastructure (GII). The rapid development of electronic commerce onthe Internet is one tangible example of how the GIS is becoming a reality. The challenge facingthe international community is to find ways to ensure that the GIS is truly global, and that peopleeverywhere are able to share in its benefits.

Top of Form

/w EPDw UKMTkz

/w EWBgKBkebg

Statistical Information Download :- MS ExcelMS WordHTMLPrint

Close

Investment in the Major Telecom Service Sector by Private Operators(upto 31.3.2000)

Items Amount (Rs. Crore)

Basic Services 3605.48

Cellular Mobile Telecom Services 11860.91

V-SAT 184.52

Mobile Radio Trunk Service 250.00

Paging Service 663.47

Source : Rajya Sabha, Unstarred Question No. 213, dated on 24.07.2001.
http://tmp/svpah.tmp/javascript:__doPostBack('d2xls','')http://tmp/svpah.tmp/javascript:__doPostBack('d2doc','')http://tmp/svpah.tmp/javascript:__doPostBack('d2htm','')http://tmp/svpah.tmp/javascript:__doPostBack('d2prn','')http://tmp/svpah.tmp/javascript:__doPostBack('d2close','')http://tmp/svpah.tmp/javascript:__doPostBack('d2xls','')http://tmp/svpah.tmp/javascript:__doPostBack('d2doc','')http://tmp/svpah.tmp/javascript:__doPostBack('d2htm','')http://tmp/svpah.tmp/javascript:__doPostBack('d2prn','')http://tmp/svpah.tmp/javascript:__doPostBack('d2close','')


37/37

Year: Period of fiscal year in India is April to March, e.g. year shown as 1990-91 relates to April 1990 to March 1991.

Units: (a) 1 Lakh (or Lac) = 100000.

(b) 1 Crore (or Cr.) = 10000000.

Some part of the footnotes/units may not be applicable for this table.

Bottom of Form

Date post:	29-May-2018
Category:	Documents
Upload:	bishnuchettri
View:	227 times
Download:	0 times

Telecom Marketing

Documents